A polyadenylated RNA of 3.0 kb (T3.0) is transcribed from the opposite strand of ORF50 DNA template in the KSHV genome and has been annotated as a non-coding RNA. ORF50 encodes the replication and transcription activator (RTA) that controls switch of the virus between latent and lytic life cycle. We found that T3.0 encodes several small peptides and one of them (designated viral Small Peptide-1 or vSP-1) interacts with RTA and prevents it from being degraded through the ubiquitin-proteasome pathway. As a consequence, vSP-1 facilitates KSHV gene expression and lytic replication. The significance of these findings is multi-fold. First, in both mammalian and viral genomes, a large proportion of sequences are transcribed and annotated as noncoding RNAs. Our study suggests that some of these noncoding RNAs may function through encoding small peptides. There might be large numbers of small peptides in mammalian cells that play critical roles in regulation of biological processes. Second, our finding revealed a novel mechanism of regulation of gene expression as well as viral life cycle. We believe that small peptides represent an untapped source of important biology. To prove this hypothesis and to estimate the magnitude of small peptide world in biology, we proposed to explore the significance of small peptides to biology of mammalian cells and viruses with the specific aims as follows. (1) We would use proteomics approach to identify small peptides from the KSHV genome. Enriched small peptide pools will be prepared from KSHV-infected cells as well as purified virions and subjected to mass spectrometric (MS) analysis. A special potential KSHV small peptide database will be developed and used to analyze the MS raw spectra for identification of KSHV small peptides. (2) We will choose a few representative viral small peptides identified in aim one, together with two T3.0-encoded small peptides (vSP-1 and vSP- 2), to assess the functional roles of viral small peptides in KSHV life cycle using genetic approaches. Through this exploratory investigation, we hope to address the question if small peptides encoded by previously annotated noncoding RNAs are common features in mammalian cells and viruses and to demonstrate the biological significance of these small peptides in biology. This study may lead to a new field on biological regulation by small peptides.